Murdoch Pty Ltd is considering three mutually exclusive projects. The initial cash outflow and after-tax cash inflows associated with each project are show in the following table: Cash Flows Project X ($) Project Y ($) Project Z ($) Initial Cash Outflow Cash Inflows Years 1-5 50,000 100.000 115,000 27.000 41,000 43.000 A) Calculate the payback period for each period B) Calculate the NPV of each project assuming, that the company has a cost of capital equal to 13% C) Calculate IRR for each project. D) Summarise the preferences dictated by each measure, and indicate which project you would recommend. Explain why.

2. Whale Wash Limited issued eleven-year bonds one year ago at a coupon rate of 7.5%. The bonds have a face value of $150.000 and make semi-annual payments. It the YTM on the bonds is 8.6% p.al, what is the current bond price? 3. Why does the value of a share depend on a dividend? 4. Perth Limited has just paid an annual dividend per share of $0.75. The firm expects that dividends will grow at a rate of 8% pa for the next three years, before settling down to a growth rate of 5% pa forever. The firm's required rate of return is 12%. Estimate the value of Perth Ltd's